The Congressional Research Service (CRS) has updated its report on Social Security minimum benefits, with a focus on the special minimum primary insurance amount (PIA), an alternative benefit formula that increases benefits paid to workers who had low earnings for many years and paid to their dependents and survivors. The CRS says that the number of beneficiaries of the special minimum PIA has declined.
Unlike the regular Social Security benefit formula, which is based on a worker’s average lifetime earnings, the special minimum PIA is based on the number of years a person has worked with earnings at or above a certain threshold. Beneficiaries receive the higher of the two benefit amounts.
The number of recipients qualifying for the special minimum PIA has been decreasing, the CRS reports; it attributes that trend to the way regular Social Security benefits and the special minimum PIA are computed. In 2019, according to the Social Security Administration (SSA), approximately 32,092—0.05%—of the 64 million Social Security recipients qualified for the minimum benefit.
Years of Coverage
The determination of a year of coverage (YOC)—a year during which the worker has covered earnings more than a specified threshold—is key to computing the special minimum PIA. Since 1991, the annual threshold for a YOC under the special minimum PIA has been different from the required amount for earnings credits (or quarters of coverage) under regular benefits. Since then, the annual threshold for a YOC under the special minimum PIA has equaled 15% of the “old law” contribution and benefit base, which is indexed to increases with the national average wage.
As a result, the report says, YOC thresholds for the special minimum PIA are indexed to wage growth. The 2020 YOC threshold is $15,345. In 2020, the earnings required for one earnings credit, or one quarter of coverage, is $1,410.
As with the earnings credit, the YOC thresholds create a “cliff” effect. If a worker’s earnings in a year are even one dollar short of the threshold for that year, a YOC is not credited. Because the YOC threshold is much higher than one earnings credit, it would be generally harder for a low-earning worker to qualify for a YOC threshold under the Special Minimum PIA than one earnings credit under the Social Security regular benefit.
Special Minimum PIA Benefit Amount
The special minimum PIA benefit amount depends only on how many YOCs a worker has. A worker must have at least 11 YOCs to be eligible for the special minimum PIA benefit. The special minimum PIA monthly benefit is $42.50 in 2020. The special minimum PIA monthly benefit increases by about $44 for each additional YOC; however, the special minimum PIA monthly benefit only increases until the number of YOCs exceeds 30. YOCs beyond 30 do not increase the Special Minimum PIA amount; a person with 30 years of coverage in 2020 would qualify for a special minimum PIA of $886.40.
Special Minimum PIA Recipients
Since 1999, the provision has benefited only newly entitled beneficiaries whose regular benefit is subject to the windfall elimination provision (WEP), the report notes. As of December 2019, 32,092 beneficiaries were entitled to a benefit based on the special minimum PIA. The CRS says that they broke down thus:
Special Minimum PIA Recipients, December 2019
| Group | Percentage of Special Minimum PIA Recipients |
| Retired workers | 88.9% |
| Disabled workers, spouses, disabled widows and widowers, widowed mothers and fathers, and children | 5.8% |
| Nondisabled widows and widowers | 5.3% |
The number of Social Security beneficiaries receiving the special minimum PIA has decreased precipitously, the report notes.
| Measure | 1999 | 2019 |
| Recipients of special minimum PIA | 205,000 | 32,092 |
| Affected beneficiaries as a percentage of all Social Security beneficiaries | 0.5% | <0.1% |
Effect on Current Beneficiaries
The special minimum PIA has little effect on current beneficiaries, says the CRS.
Because the regular PIA uses wage indexing and the special minimum PIA uses price indexing—which tend to increase at a slower rate than wages—regular benefits to newly eligible beneficiaries today are almost always greater than the special minimum benefit. Thus, says the report, the impact of the special minimum PIA has diminished; the number of beneficiaries it affects and the size of the additional benefit from it have both declined.
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